How To Choose the Best Forex Broker

Online trading is no small task and is an activity that should be approached with sincere caution. It proves to be most beneficial to receive professional training and counsel upon entering the forex trade industry.

There are several different approaches and they all are enhanced with the tool supplied by forex broker reviews. These reviews offer detailed insight on the capabilities and ratings of professional brokers in the industry. This is a beneficial guide that has been developed for and highly utilized by current and potential forex traders. The worst move possible in the forex trading industry is to proceed to the trading platform without a broker. An even worse mistake is moving forward with one who doesn’t possess the necessary credibility to grow or successfully groom clients in the forex trade world.

Tips on Picking a Forex Broker

Take your time when looking for a reliable forex broker to make sure your money and trades will be handled appropriately. All U.S. forex brokers must register with the National Futures Association (NFA), a self-regulating government body intended to provide transparency. Go to the NFA webite to verify the broker’s compliance and look for complaints or disciplinary actions that could affect your final decision. 

The safety of your funds and private information is more important than any other consideration when you open a forex account because brokers can get hacked or go bankrupt. Unlike stockbrokers, whose clients’ funds are protected by the Securities Investor Protection Corporation (SIPC) if the brokerage shuts down, U.S. forex brokers provide no account protection. Even worse, a forex broker can recover more than your account balance through legal action if it doesn’t offer negative balance protection, which promises you won’t be asked for more money than your account balance if a position crashes.

The forex review system is designed to place relevant information regarding the broker at the fingertips of the investor. It offers an insightful comparison of some of the most viable contributions of the broker and helps the investor to see what the differences are between various brokers. It’s a great approach that can potentially save the investor a great deal of time, money and effort in the long run. There are many questions and concerns as one enters the forex trade platform. Those who are completely new to the industry may not be clear on what’s important and what makes the difference. The reviews offered on forex brokers can help to spark a general idea on what brokers should offer and how these may make a difference in trading abilities and what’s to be expected in the outcome.

Choosing a forex broker requires you first to figure out what type of investor you are and your goals in investing in currencies. 

Each broker that features forex investments has advantages and disadvantages. Some of the most important things to consider are regulation, the level of security provided by these companies and transaction fees. Security features varies from broker to broker. Some brokers have integrated security features like two-step authentication keep accounts safe from hackers. 

Online Forex Brokers Comparison offer an enormous amount of useful information for selecting brokers for online trading.

Trading Platform & Software

As the trading platform is your gateway to the market, you want to ensure that the trading platform that you are using can be relied upon. Most brokers will offer traders a selection of trading platforms to choose from. Most of the time, the trading platforms are provided by third party trading solutions providers such as MetaQuotes Software. There are also some brokers who have taken to developing their own proprietary trading platforms in an attempt to differentiate themselves from other brokers in the industry. Often times, these proprietary platforms are the best platforms to trade with as they are specifically designed by the broker’s client base.

Nevertheless, a good broker should be able to provide a good selection of platforms. This is because some traders prefer to trade from the desktop computer and some traders prefer to trade from their smartphones. It should be noted that the most common trading platform that you will find among the different brokers in the industry is the MetaTrader 4 platform. It is estimated that at least 85% of brokers in the industry uses the MetaTrader 4 platform. So this means there is a very strong possibility that this is one of the platforms that you will be using.

The forex broker review can offer critical information to help the investor narrow down their choice of brokers based upon their standings or how they compare to others. Inside the review, there are details on whether or not the broker offers a free demo. This gives the potential investor an opportunity to separate those who do from those who don’t. There is also information included on various bonuses offered by the different brokers as well as information on the structure of trade platform. One of the most beneficial pieces of information included in the review is the method of accepted payments. This is vital to investors as it allows them to only consider the brokers who accept the forms of payments they plan for their trading.

Demo Account

Have you ever bought a car without taking it for a test drive, first? We certainly hope not. Likewise, you should open a practice account with any broker you are planning to trade with. Almost all brokers now offer practice accounts, which let you get a feel for the broker before committing any money.
It allows you to practice on virtual money before you decide to start trading your real capital. It also allows you to test the broker’s trading platform. 

Dealing Desk (DD) brokers

  • “Market Maker” (MM) brokers

No Dealing Desk (NDD) brokers

  • “Straight-Through Processing” (STP) brokers
  • “Electronic Communication Network” and “Straight-Through Processing” (ECN/STP) brokers
  • “Direct Market Access” and “Straight-Through Processing” (DMA/STP) brokers

Types of Trading Accounts

Trading accounts depend on the amount of lots that are traded, and therefore they fall into a number of types: standard, mini, micro accounts. A standard lot consists of 100,000 units, a mini account is ten times smaller (10,000 units), and a micro account is hundred times smaller and amounts to just 1,000 units. And, with some brokers it is possible to configure an account of an individual size.

Accounts with small amounts of capital are basically addressed to forex newbies who have recently entered the forex market and want to try their hand in currency trading without a risk to their well-being.

Commission Account Spreads

Those who choose to pay flat rate commission fees usually gain access to tighter spreads than those signed up to fixed spread or standard account types. Brokers such as Octafx, Liteforex and Avatrade offer tight spreads on major currency pairs such as the EUR/USD that are hard to bet, averaging 0.09-0.13 pips.

As shown below, there can be significant variation between the average spreads offered by different brokers, with certain brokers having strengths within certain markets. For instance, Liteforex offers the tightest spreads for the AUD/USD fx pair, while Octafx provides the lowest spreads for the EUR/USD currency pair. Therefore, when choosing a broker and variable spread account type, it is best to research the average spreads for the specific financial instruments you want to include in your trading strategies.

Smooth withdrawal process

When I asked for a withdrawal, I want my money back as soon as possible.

I don’t wanna hear excuses from the broker like, “Oh, if you leave the money with us for another one more month, we will give you an additional $200 deposit bonus.”

If you hear excuses when you want to take out your money, then that’s a huge red flag.

When you want to withdraw your money, it should be done within two to three business days and you should get your money back soon, depending on the medium of the withdrawal.

Quality of Client Support

Quality customer support is one of the key services of any broker. Many brokers provide 24/7 support to correspond the needs of their traders who might need assistance at any time. Besides, an array of languages offered by the broker is a benchmark indicating how active globally the broker is and whether this company is apt to multilingual trading community.

The website of a broker should be clear enough to describe the basic issues that may occur while trading. Being explained properly, a problem can be resolved and eliminated by the trader at once. Of course not all the cases match the FAQ section of the site, and hence professional support team ready to assist the trader at any time is critically important.

At this point it won’t be out of place to focus on the means of communication offered by the broker: it is an additional advantage if the broker communicates via various media: phone, live chat, e-mail, and it would be an asset if the trader knows the name and position of the person in charge.

It is recommended that the trader checks the efficiency of the broker’s support at an early stage, when trading on a demo account, for the purpose of minimizing money losses. It is optimal to know the level of competence of the broker’s stuff in advance.

No Limitations on Trading Styles

The best brokers out there never restrict their customers in terms of trading styles. When choosing a brokerage, you should take your trading style into account. Always consider your style before you make a pick, including your trading frequency and the length of your trades (long-term versus short-term).

If you are a scalper, for example, be sure to pick a brokerage that enables you to practice this technique and uses an ECN platform. Provided that you prefer day trading, the premium should fall on qualities like high speed, narrower spreads, and reliability.


Here is a handy list of the most-respected regulatory bodies by country:

  • USA: Commodity Futures Trading Commission (CFTC)
  • Switzerland: Swiss Federal Banking Commission (SFBC)
  • UK: Financial Conduct Authority (FCA)
  • Germany: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
  • Australia: Australian Securities and Investment Commission (ASIC)
  • Canada:  Investment Information Regulatory Organization of Canada (IIROC)

Forex Leverage and Margin Requirements 

The issue of leverage is increasingly becoming a trade off for trading with a regulated forex broker. The rules are always changing but at the time of writing, leverage in Europe (regulated by ESMA) is capped at 30:1. In the USA it is 50:1. It is still possible to trade with leverage as high as 500:1 with an offshore broker. One of the few places left that can offer both a reasonably high amount of leverage and quality international forex regulation is Switzerland, where FlowBank operates.

How to avoid forex slippage

Regulated brokers are required to offer ‘best execution’ on your trade- which means when you click a market order to deal on a forex pair, your broker should give you the best price available to them. Trading with unregulated brokers increases the chance that your trades get ‘slipped’ – meaning the price might be a pip or a fraction of a pip worse than it was when you clicked the button. Over time, this slippage cost adds up and acts like a hidden fee on top of the bid/ask spread to the cost of trading.

Varied Deposit and Withdrawal Options

It is always nice to have a varied choice where payments are concerned. When choosing a Forex broker, be sure to check what methods it supports for deposits and withdrawals. The most common options you are likely to encounter include standard bank transfers, credit and debit cards, and online banking.

Many brokerages also accept payments via popular e-wallets such as PayPal, Skrill, WebMoney, and Neteller. The best brokers in the industry support country-specific methods to the benefit of customers from different jurisdictions.

Also important is to check the transactional costs and the processing timeframes of the brokers you are interested in. Some companies tend to handle payments faster than others. Good brokerages would rarely charge customers on their money transfers.

Traders whose live accounts remain inactive for a specific period (typically three to twelve months) normally have to pay nominal monthly fees for maintenance. We suggest you pick a company that offers negative balance protection if you intend to trade on margin and leverage your positions.

A reliable and well-regulated broker would inevitably adopt a segregated-account policy. This is to say customers’ funds are kept in separate accounts to protect them in case the trading company enters insolvency. 

The Bottom Line

If you have confidence in your forex broker, you will be able to devote more time and attention to analysis and developing forex strategies. A bit of research before committing to a broker goes a long way, and can increase an investor’s odds of success in the competitive forex market.

© 2007 – 2024 Trading financial instruments carries high level of risk to your capital with the possibility of losing more than your initial investment. This site will not be held liable for any loss or damage in result from using the information within the site including forex Broker reviews 2024, market analysis, trading signals, learning resources and comparison tables. The data within this website is not necessarily real-time nor accurate and do not represent the recommendations of the employees. Currency trading is not suitable for all investors. Before deciding to trade currency or any other financial instrument please consider consider your investment objectives, level of experience, and risk appetite. While we do our best to provide up-to-date information, we strongly encourage you to verify it directly with the broker of your choice.